Home > The Agreement in Bali Is Just the Beginning: Now the Work Toward Implementation Starts

The Agreement in Bali Is Just the Beginning: Now the Work Toward Implementation Starts

Submitted by Selina Jackson
On Wed, 12/11/2013

co-authors: Gerard McLinden

By now the ink has dried on the hard-fought achievement of the 9th Ministerial Conference of the World Trade Organization (WTO) last weekend in Bali, Indonesia. The landmark agreement – the first since the establishment of the WTO in 1995 – consists of three components: trade facilitation, some agricultural topics, and issues of importance to least developed countries.

Beyond the substance, the agreement comes at an important moment. Just at the point when many feared that momentum was shifting toward bilateral agreements and “mega-regional” trade agreements and away from the WTO, members managed to reach agreement at the multilateral level. This is especially important for the small and least developed countries that rely most heavily on the multilateral system to have an equal voice, secure market access, and effectively integrate into the global economy. While trade ministers, the WTO Secretariat, and its Director General deserve credit for the outcome and probably a much-needed rest, attention must now turn toward developing a concerted and well-coordinated effort to ensure successful implementation.

The package of trade measures agreed in Bali will provide important economic benefits to the world economy and to developing countries, in particular. The centerpiece of the package, the Trade Facilitation Agreement[1], is designed to streamline border procedures, increase transparency, reduce inefficiencies, and improve competitiveness. Reducing the high transaction costs and unnecessary red tape traders face could provide a significant boost to global GDP, according to a 2013 study by the World Bank and World Economic Forum[2].

There is, however, a lot of work to be done to help developing countries implement the agreement and reap its benefits. With $5.8 billion spent in 2013 on trade facilitation projects[3], the World Bank Group has demonstrated its commitment to supporting trade facilitation improvements and overcoming barriers that hamper developing country’s participation in the international trading system. For example, not far from Bali, the World Bank Group is supporting customs automation, trade facilitation modernization, and efforts to increase transparency and streamline non-tariff measures in Cambodia, Laos, and other East Asian countries.

Joint statements on trade facilitation issued at the WTO 4th Global Review of Aid for Trade[4] in July and by multilateral development banks[5] at the World Bank/IMF Annual Meetings in October have highlighted the fact that significant trade facilitation-related assistance is already provided by international organizations and bilateral donors. Still, more work is necessary and new efforts are important to ensure that this trade facilitation-related assistance achieves maximum effectiveness and results.

The trade facilitation text[1] agreed in Bali outlines an approach to ensure capacity building support is targeted where it is most needed, is better coordinated, and that its delivery is effectively monitored. This is a unique feature of the agreement and one that offers potential to improve international coherence in the delivery of implementation support. The modalities of coordination are important to get right. A well-working system would reinforce existing demand-driven assistance programs, and would complement the coordination among many partners that takes place at the national, regional and international levels. It would also be able to ensure that all countries seeking assistance are able to find development partners with the capacity to support their efforts.

The WTO’s partners in the development community are ready to work together to provide trade facilitation support and to ensure the timely and effective implementation of this landmark agreement. By the time of the Bali agreement’s first anniversary, we will hopefully be well on the way to ensuring the agreement’s potential is being realized and that traders in developing and developed economies are all beginning to reap the benefits.